EcoCash tariffs reduced slightly. Who’s benefiting from this move though?

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You probably saw it in a couple of adverts yesterday; EcoCash tariffs have been reduced. Not that the advert said it explicitly, it just listed tariffs effective 1 February 2014.These are only slight reductions, something that probably explains why this wasn’t promoted extensively.

The new tariffs are in the table below.

Amount($US)Send to registered subscriber ($)Send to Unregistered subscriber ($)Cash-Out Tariff ($)
1.00 - 1.990.14N/AN/A
2.00 - 5.000.140.540.20
5.01 - 10.000.240.740.30
10.01 - 20.000.441.340.60
20.01 - 30.000.621.840.90
30.01 - 40.000.822.341.20
40.01 - 50.001.033.541.50
50.01 - 60.001.454.542.00
60.01 - 75.001.525.042.30
75.01 - 100.001.987.003.00
101.01 - 150.002.488.503.50
150.00 - 200.002.989.603.90
201.00 - 300.003.7911.004.85
301.00 - 400.003.9513.054.90
400.01 - 500.003.9814.044.95

The adjustments have largely been 2 cent reductions in higher value bands. At face-value, this is a “sacrifice” from Econet because there will be an aggregated reduction in revenue for the mobile money service which, like any other operator in this field, relies on razor-thin profit margins from transactions that add up to significant volumes with a lot of traffic.

But for the average Joe who wants to “EcoCash” $50 to another subscriber, the truth is such a minor adjustment will be hardly noticeable. To pass on a significant discount to its subscribers, EcoCash would have to make a massive reduction of its tariffs just like how Telecash zero-rated transfers between subscribers registered for its service.

Is this minor reduction EcoCash’s response to the demands of a price sensitive market?  As the market leader with a 4 million subscriber total and a handle of over $4 billion in transactions since its inception, this could be part of a strategy to maintain this momentum.

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I think, however, that this looks like an attempt to pacify industry regulators with a reduction that can help build a defense against tough tariff reductions.

There has been sentiment that mobile money tariffs are still steep with the Minister of Industry and Commerce mentioning how the Competition and Tariffs Commission has been tasked with investigating these tariffs. The last time the regulator forced an adjustment of tariffs the mobile money service providers had to effect a 34% reduction.

With a tougher economic environment and a challenging telecoms landscape, players like Econet need to do all they can to avoid anything similar to this happening again in 2015.

Mobile money has turned into a strong contributor to the profitability efforts of Econet, Telecel and NetOne and anything that eats into that has to be avoided, even if it means effecting a slight voluntary tariff reduction.

12 Comments

  1. Megatron says:

    Nigel can you review the new banking service from CBZ called smart cash,its a bank account that only requires a ID to open it.

    1. wasu says:

      Megatron, this smart cash sounds interesting, hope its not just like the others https://www.cbz.co.zw/news/41-cbz-bank-launches-smartcash, does it require USSD?

      1. fourwallsinaroom says:

        If this product accepts incoming RTGS this is definitely a win. the one thing I have always wanted from ecocash. Now the second win is if i can tie this to my ecocash wallet! and do wallet to cbz and vice versa.
        I say this because FBC prepaid has a monthly cost. And the one or two people i send money to i dont always want to withdraw cash, do a cash in, send cash. If i could just RTGS to them and get over the econet limits and charges (my bank has a flat max charge of $10) that would be a dream.

        1. fourwallsinaroom says:

          So I got the smartcash card because no one would review it! This card is not that great, doesnt accept incmin RTGS just CBZ transfers. So no different from the others, also no link to Ecocash, but it is linked to Zipit. This is similar to cell banking by POSB and the CABS product.

      2. fourwallsinaroom says:

        This is purely USSD. Also note that if you have another ZIPIT service on that line it will not work. In my case I had to use a separate line because i had POSB ZIPIT

  2. Evans says:

    Surely this is an insult to us customer. How could they make a 2 cents reduction? No wonder they are not advertising it!

    1. fourwallsinaroom says:

      Ecocash should have removed the balance inquiry fee.

      1. Edmund says:

        I totally agree. I am not charged anything when I check my bundle or airtime balances, why then should I be charged for checking Ecocash wallet balance?

  3. mwana wevhu says:

    Evans, if you are not happy with the service how come you haven’t left? Econet did this just for you, to grumble a little less than you used to because they know you ain’t going no where

  4. josh says:

    Econet now charges 15c per minute,try making a call wen yo balance is more than 15c but less than 23c ,”insufficient credit”,l don’t get it

  5. Rogue says:

    Telecel is still there cheapest when it comes to mobile money tranfare

  6. mwana wevhu says:

    This just proves my point once again, Josh does Econet know you are unhappy about the service they give you or does everyone else around you know your grievance better than your service provider. Josh does not sound like a subscriber who would show up and surrender their sim card to show dissatisfaction, you will grumble out loud to us who are much happier about the service we get and the company you will know nothing. Join Evans maybe you could be a team.

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